Re: Improving profitability

From: Rick Bruner <rick_at_imtstrategies.com>
Date: Fri 08 Dec 2000 13:36:13 -0500

MAY HERZ <may_at_inside-mexico.com> WROTE:
> We have been on-line now for a year, and have steadily
> increased the number of visitors we have. We sell
> educational videos and cd's, and publish a monthly
> newsletter. Problem is, not too many sales and lots and
> lots of visitors to the newsletter...teachers
> requesting permission to use information, happy
> readers.... My question is, how can we improve the
> profitability of the website?

May,

Great question, but I'm afraid the answer is not too
promising. We did some analysis recently of the top
trafficked web sites and their ability to "monetize"
traffic, with the upshot being that most sites,
particularly those pursuing ad-supported online
revenue model, are more or less sucking wind. Check
out the following link for a summary of that research:

http://www.imtstrategies.com/download/TI03.05.pdf

Even most e-commerce sites were "monetizing" their
traffic to a much lower degree than traditional
publishers such as the NY Times, to say nothing of
traditional retailers such as Wal-Mart.

The bottom line is, unless you can do a massive volume
of traffic, and very few can, the sites most
successful turning visitors into profit are those with
rarified niche audiences. Bear in mind, all niche
markets are not equal. Cliff Kurtzman, the CEO of
Tenagra (Online Ads' host), made that point powerfully
for me once, talking about how Tenagra ran two content
sites, Year2000.com and TennisServer.com. For both, he
applied the same best practices, but the bottom line
was that advertisers who wanted to reach people about
the Y2K bug were selling custom programing solutions
worth hundreds of thousands of dollars, while
advertisers seeking to reach tennis enthusiasts were
selling $100 rackets, thus they were willing to spend
a lot less on advertising.

I realize you're not selling just ads, also e-commerce,
but again, trying to convert teachers to buy $15 CDs,
of which you get, what, a 10-20% mark-up, may be a
hard row to hoe.

Best,

Rick

   Rick E. Bruner VP of interactive marketing research
   IMT Strategies http://www.imtstrategies.com
     203 705-6536 rick_at_imtstrategies.com
           Author "Net Results 2: Best Practices for Web Marketing"
http://www.amazon.com/exec/obidos/ISBN=0735710244/executivesummaryA/





Received on Fri Dec 08 2000 - 12:36:13 CST